No Mere Child's Play : Aggressive marketing may help Nintendo snare 85% of the video game market this year. But its mystique shows signs of slipping.

Santa is being asked for lots of video games this Christmas. But not just any video games--only Nintendo's.

Not Sega's. Not Atari's. Although these two game systems are--at least from an adult's perspective--roughly equivalent to Nintendo, they carry the curse of the also-rans: the Lee's and Wrangler's to the Levi's of the denim world.

"Most kids at school have Nintendo," explains Sonya Pritzker, a 13-year-old Santa Monica eighth-grader. "If they have Sega or Atari, they don't talk about it."

And why should they? Nintendo has done a brilliant job of capturing and protecting as much as 85% of what analysts estimate will be $2.3 billion in sales this year.

"A mystique has been created," says Bruce Apar, editor of Toy & Hobby World magazine. "That's all there is to it."

But the mystique is already showing some early signs of slippage.

Analysts say that despite the continued hoopla among the pre- and early-teen set, the pace of video game sales, which has accounted for as much as 25% of the nation's retail toy sales in the past two years, has slowed, and sales could peak next year.

Nintendo was also hit earlier this week by a $100-million lawsuit from Atari Games, alleging unfair monopolization of the market. Atari also released its own, unlicensed versions of Nintendo games, a move that could severely weaken Nintendo's hold on the market.

"Mark my words: It's a Cabbage Patch waiting to happen," says Trip Hawkins, president of Electronic Arts, a publisher of software games for the personal computer referring to collapse of Coleco's Cabbage Patch doll. "This is a toy. And that means it's a fad."

Still, if Santa's mail bag is any indicator, the Nintendo system--and not its competitors--is the preferred gift among many youngsters this holiday season.

Why? The answer appears simple enough on the surface. Nintendo, virtually single-handedly, resuscitated the video game market in 1985, two years after it did a spectacular crash and burn. And not only was it first, it was good. Nintendo's animation quality, while not as highly rated as that in Sega's later entry, is still far above that of the early video games.

Finally, Nintendo gets high marks for the quality of its fast-paced games, whose characters and gyrations seem to possess the power to mesmerize their core audience: boys ages 7 to 14. Characters such as the Mario Brothers, two miniature, mustachioed muscle men whose job it is to rescue the Princess Toadstool; Zelda, another hapless princess held captive by the evil Ganon, and Piston Honda, one of the top-of-the-card contenders in "Mike Tyson's Punch-Out!!"

It all comes together neatly at the cash register, where the cassette players retail from $80 to $160, depending on the number of accessories you're talked into buying, and the game cassettes themselves fetch upward of $69.

By year-end, Nintendo expects to have found a home in 11 million U.S. households. And, if corporate projections hold, by the end of the 1989, about 27% of American families will own a Nintendo set.

"Once you're that big, it doesn't matter if someone else has a better system," says Toy & Hobby World's Apar. "They were more aggressive earlier, and they won the market."

But beyond getting into the market first with quality products, Nintendo has spent no small amount of time trying to understand--and manage--that market.

First, explains Peter Main, Nintendo of America's marketing vice president in Redmond, Wash., the company dissected the rise and demise of the first video craze. Their conclusion was that the market fell apart because it was flooded with shoddy games that confused and angered buyers, not because buyers were suddenly disinterested in the genre.

With that perspective, the company then carefully followed the path blazed nearly three years earlier by Nintendo Co., the 99-year-old Japanese parent corporation whose origins are in making playing cards for the popular Japanese game, Hanafuda. In 1970, the parent corporation started making hand-held computer games and in 1983 introduced its "Famicom," or Family Computer into the Japanese market. Today, these systems are in about one-third of all Japanese households.

Followed Japanese Model

The system was exported to the United States in late 1985, first in a trial run in New York City and then in a nationwide rollout in 1986. The early games were spun off the popular titles that Nintendo had developed for the coin-operated arcades throughout the nation's shopping malls: "Donkey Kong," the original "Mario Brothers" and "Duck Hunt."

The original titles were big hits, but Nintendo's success in the United States has come from carefully following its Japanese model, adapting it only where necessary to fit American kids.

For example, "Mario Brothers" and its two sequels "Super Mario Brothers" and "Super Mario Brothers II" are played the same on both sides of the Pacific. (In fact, in Japan, they're on "Super Mario Brothers III.") It's the same with "Zelda" and its sequel, "Zelda II--The Adventure of Link."